1979.08.08
STATE ECONOMIC COMMISSION / STATE ADMINISTRATION OF INDUSTRY & COMMERCE / PEOPLE'S BANK OF CHINA
nits belonging to
the same department or sector, the mediation and arbitration
procedure can be decided by the authorities in charge of that
department or sector.
During the period of mediation and arbitration, the arbitrating
authorities, in the light of the actual situation, may notify both
contractors to stop executing the contract for the time being.
(7) The People's Bank is to supervise all enterprises' execution of
their economic contracts by means of credit and settlement
management. The People's Bank will gradually take the measure of
granting loans to enterprises in accordance with their economic
contracts, on the basis of the state plan. The rules of settlement
must be conscientiously followed and settlement discipline strictly
adhered to. Both contractors must settle the account in accordance
with the mode of settlement specified in the economic contract, and
the bank should handle acceptance or refusal of payments, or
deduct the required sum of money from the account of the
enterprise which delays payment for the goods or payment of
compensation, in accordance with the specific regulations of the rules
of settlement.
(8) The money paid in compensation caused by an enterprise's own
errors should not be included in the cost of production of the goods,
but should be paid out of the enterprise's share of the profits
or out of its own funds. If a serious violation of this rule occurs,
a fine will be deducted from the wages of those who are responsible
for it, and an investigation into their administrative or legal
responsibilities should be made.
For any failure in executing the contract caused by force majeure or
other reasons which are really not brought about by the enterprise
itself, the enterprise can be freed from economic
responsibilities when the above causes are proved through
investigation by the arbitrating authorities. The authorities in
charge can take other measures to recoup as much of those economic
losses as possible.
(9) In order to supervise enterprises and to encourage them to
execute their contracts conscientiously, the supervisory authorities
have the right to verify both the statistics and data concerned and
the actual execution of the contract. If problems that hamper the
execution of the contract are discovered, the departments concerned
should be asked to take effective steps to solve the problem in
time. Any violations of the law -- such as performing shoddy work or
using inferior materials, making profits by acting as a broker,
selling a contract at a profit, or purposely avoiding supervision --
should be put to the Administration of Industry and Commerce for
investigation and punishment. If it is a serious case, it should be
handed over to the judiciary for punishment by law.
(10) Economic contracts are major business documents. All
enterprises should establish files, compile ledgers and keep
them properly. For a guaranteed contract,the enterprise should give
a copy to the guarantor authorities for special filing.
(11) In their work, the contract supervisory authorities should
closely cooperate with judicial, planning and other business
departments concerned. Necessary liaison systems should be established
for exchanging information, coordinating actions and strengthening
collaboration.
(12) All parts of the country are asked to adopt the above
points as experiments, to sum up their experiences and to offer
suggestions for further amendments.